SBC Barcelona: No more “greenwashing,” ESG creates real value for gaming companies

SBC Summit Barcelona, a highly anticipated event that brings global sports betting and iGaming industry leaders, wrapped up last week. One of the panel discussions was focused on the importance of Environmental, Social and Governance (ESG) in gaming. Additionally, the presentation revealed how ESG can create value for companies and what changes can be expected in the near future.

Rachel Decelis, KPMG's Senior Manager – Environmental Social and Governance, was the speaker at the SBC Summit Barcelona panel titled "ESG in gaming: Corporate value of sustainability," and tackling the issue head-on. During the presentation, she explained that gaming businesses use data centers which in turn create carbon emissions. Those carbon emissions reaffirm the importance of ESG in the gaming industry.

Citing recent research, the panel revealed that customers in the gaming industry are showing interest in sustainable products. In fact, those customers are interested in even paying a premium for sustainable products. This can undoubtedly help gaming companies grow and it is an important factor that may impact their revenue in the future, Decelis said.

But ESG metrics can also influence the decisions made by investors. Within a gaming ecosystem that represents a sustainable, responsible and resilient organization, ESG can add value by attracting investors. A prime reason for the positive impact of ESG are capital markets. Currently, investors, markets and banks are being conscious of investing within the gaming industry. Setting an example for their customers, those investors are looking into organizations that have established ESG agendas and strategies.

It's not only investors that show interest in gaming organizations driven by ESG values. Having a strong ESG strategy can help attract value-driven organizations with strong ethical reputations. This in turn can bring invaluable partners for gaming operators.

Besides attracting strong partners, ESG can also add value by attracting value-driven suppliers. In addition to suppliers, such strategies can also attract and retain a skilled and diverse workforce. Showing strong ESG agendas may counter possible industry negativity while at the same time presenting an ethical and value-driven image.

Environmental, Social and Governance strategies and compliance can improve gaming companies' collaborations with regulators. While regulators are after dealing with organizations and companies that fully comply with their license conditions and legislation, compliance with ESG can improve such partnerships.

A key topic discussed during the "ESG in gaming: Corporate value of sustainability" panel was the upcoming changes that may impact all large companies under the Corporate Sustainability Reporting Directive (CSRD). The Directive is expected to apply to all large companies or groups that meet 2 out of 3 criteria. The criteria are having more than 250 employees and/or €40m in turnover and/or €20m in total assets.

All large companies that meet 2 out of 3 criteria under the CSRD will have to meet requirements starting from January 1, 2024. Under the requirements the companies will start ESG reporting, tagging digital data, including a management report and mandatory limited assurance. In other words, sooner or later, meeting ESG criteria will be inevitable for some large companies.

The recent panel revealed that there is a clear read across when it comes to betting and gaming. The connection between gaming and betting is based on multiple factors such as people, prosperity, planet and principles.

What's more, the discussion panel revealed that all companies have seen an increase in their share percentage once committing and implementing ESG strategies and initiatives. Besides helping companies increase share percentage, ESG initiatives can also be leveraged as a marketing tool, the discussion revealed.

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